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mcm daily market update 18.Feb.22

ST trend: down (with potential ST bounce attempt)

Yesterday we were noting that the ST trend was neutral as both sides were inefficient via FGSI and ML was being whipsawed in both directions. We did mention that "ML is still a key level so if one side manages to sustain a move above/below ML, that would be important to consider". The market obliged. Once ML was lost on the downside, sellers never looked back. Price grinded lower the entire RTH session with only a feeble bounce attempt late morning, which was quickly exhausted and we closed at the lows.

The o/n proved once more that closing at the lows is a trap, especially during OPEX week. We bounced from the lows right into a ML test. ML capped price with ease and the market kept making lower highs, until it finally plunged on yet another Russia headline. The biggest problem for buyers is that this decline was so large that it took out yesterday's lows (which were unconfirmed on FGSI). So while FGSI is at extreme pessimism and could trigger a near term bounce, because the lows are confirmed now, more work is likely needed before finding a bottom. Bigger picture, sellers are in control until ML is won back in a sustained way. Today is OPEX, so expect whipsaws in both directions. Due to the large drop from yesterday, market makers might be incentivised to push this higher, just something to be aware of.

mcm daily market update 16.Feb.22

ST trend: neutral

Yesterday we were noting that the ST trend was up, as buyers had won back ML and despite FGSI reaching extreme optimism they kept pushing higher. The RTH session was less bullish than the o/n, as buyers were not able to continue to push, but it was a gap 'n camp with price consolidating sideways in a tight range. However buyers did manage to hold above ML, which was important.

The o/n today saw even more sideways action. Buyers did manage a new high on the European open, similar to yesterday, but that spike was sold and we are back where we were before it. Price also back-tested ML (which was dragged higher), so we have a key level near-by. As long as buyers can hold ML, we can see higher prices being attempted. If ML is lost, then a deeper consolidation would likely be in play with the 4420 lvl being 1st area to keep an eye on and the 4395-4400 area being the MUST hold for buyers.

mcm daily market update 7.Feb.22

ST trend: neutral

On Friday we were noting that the ST trend was down, with potential bottoming attempt, as we had an unconfirmed low on FGSI and buyers were attempting to bounce from that area. We mentioned danny and 400bar MA as being important near term, while ML test being the "real test". Buyers did manage to test macro-ML after breaking danny, but were quickly rejected there. However they managed to hold a higher low vs the unconfirmed low and then staged a very impressive rally to win back macro-ML and ML, before peaking in the same 4530-4540 area. The decline into the RTH close was vicious and broke back below ML.

Sunday's session didn't do much, price whipsawed around ML neither side being able to make the breakout/down stick. Today followed the same pattern, with price spending actually more time below ML than above. Nonetheless buyers are attempting to breakout again now. We have both bullish and bearish EE on FGSI, so those lvls are important to confirm the direction after price moves away from ML.

mcm daily market update 4.Feb.22

ST trend: down (with potential bottom attempt shaping up)

Yesterday we were noting that the ST trend was down, with a bounce attempt, as buyers had put in another unconfirmed low pattern and bounced off there, but putting in bearish EE. We mentioned that ML remains a key level and key it was, as it capped price on every bounce attempt and then mkt was sold to new lows. The market acted very weak yesterday and there wasn't even a gap fill attempt and it closed at the lows.

That close proved to be a bear trap at least for half of the o/n session. AMZN came out with decent earnings and given that it was sold brutally yesterday (was over -8% at some point), ES ramped almost 60 points on the news. However, the big problem for buyers is that ML contined to cap price action. We had an initial test right off the AMZN news and ML held. Then after catching their breath for a bit, buyers tried again, but failed at ML once again. After that there was no looking back and we dropped to take out yesterday's lows. Another unconfirmed low attempt, but after the 8:30 NFP numbers also this bounce failed and we just took out the o/n lows. Going fwd, things look pretty bearish. Yesterday's RTH action was clearly bearish. And the o/n retracing the entire ramp off AMZN news is also horrible for buyers. It remains to be seen where the market would find suppor. Danny and 400bar MA are important near term. And if buyers can find their footing then ML will be the real test.

mcm daily market update 31.Jan.22

ST Trend: neutral (potential ST bounce underway)

On Friday we were noting that the ST trend was down, with potential bottoming attempt, as price kept making lower lows after losing ML and despite hitting extreme pessimism on FGSI several times. We did mention that once danny gave way the bottoming attempt would be confirmed and indeed once danny failed to cap price, buyers pushed it all the way into a ML back-test. Initially ML held, but buyers managed to make a higher low on the pullback from there and then broken above ML convincingly. We did get another ML back-test (from above this time), right before the "famous" late Friday ramp.

The o/n action since Friday's RTH close was as text-book as possible. Pullback after hours on Friday, then another push to minor new highs on Sunday, highs which remained unconfirmed on FGSI. Then pullback from there and another test of the highs on Monday before finally giving up and having a pullback into a ML test. ML is the key line in the sand, as usual. Buyers want to hold ML and bounce this back to the highs area to have hopes at another push higher. FGSI hit extreme pessimism on this ML test, so they have a decent chance at that. On the other hand, sellers need to break below ML. Capping price either at danny (ideally for sellers) or at least 400bar MA is what sellers want to see. FGSI is already showing buyers are inefficient on this bounce off ML, which is not what they wanna see. If ML is lost, buyers would need to make a stand at macro ML or at the 1st bullish EE lvl (the low where the Friday late ramp started).

mcm daily market update 28.Jan.22

ST trend: down (with potential bottoming attempt)

Yesterday we were noting that the ST trend was up as sellers were inefficient via FGSI, buyers had won back ML and FGSI was refusing to move to extreme optimism. We mentioned " there is a lot of room on FGSI to push prices higher before it reaches extreme optimism and signals a ST pullback". The market obliged once more and price pushed all the way to 4420 before FGSI finally reached extreme optimism. Buyers lost control there and we had a very strong pullback which sliced through ML in a big warning that buyers are in trouble.

The o/n looks quite bearish so far. Price whipsawed ML for a while, but buyers again lost the battle and once it started coming lower, the action was as bearish as it can get. Each bounce was capped by danny and despite FGSI hitting extreme pessimism and even attempting to put in unconfirmed lows, the market kept making lower lows. Now we have a confirmed local low on FGSI after breaking several unconfirmed lows, so it would seem more work is needed before finding a meaningful bottom. Danny is the big line in the sand for the immediate term trend. As long as it continues to act as resistance, price can continue to make lower lows.

mcm daily market update 27.Jan.22

ST trend: up

Yesterday we were noting that the ST trend was up with potential pullback starting as FGSI was coming back from extreme optimism and was showing unconfirmed highs. We did get a few whipsaws, then a proper pullback into a ML back-test before continuing back higher. We also warned that due to FOMC large swings in both directions were likely while waiting for the decision. The market obliged. Additionally we mentioned that the announcement itself is likely to trigger a very large move, while the 1st move is usually fake. The market also obliged on both. We saw a spike 3min after the announcement, then the market waterfalled more than 100 points to reach 4300 again.

The o/n saw an early attempted bounce which tested ML from below and then the market sold off to new lows. The lower lows were unconfirmed by FGSI and that triggered another large bounce (typical action). Buyers got price back above ML and FGSI is showing that sellers are inefficient. So the trend seems to be back to up. Buyers need to hold price above ML to avoid any doubts. As long as that happens, there is a lot of room on FGSI to push prices higher before it reaches extreme optimism and signals a ST pullback.

mcm daily market update 24.Jan.21

ST trend: down

On Friday we were noting that the ST trend was down, as the market continued to act weak. We also warned that "Large bounces are possible, but are likely to be good selling opportunities, while attempting to buy dips is extra risky. Dust should settle after OPEX, so the timing window for a potential important low would be Monday or Tuesday". That proved to be the case, as the large bounce off the RTH open back-tested ML and was rejected there strongly. Market then fell almost 100 points from that ML test to close near the lows.

On Sunday, buyers managed to step in and push price a bit higher, but then hit a brick wall near 4425 and stopped. Today's o/n action pushed once again in that 4425 lvl and got rejected and proceeded to break Friday's low. We are now in the timing window we considered for a low - today or tomorrow. While it does no seem the low is in yet, another large drop today could reach capitulation on the buyer side and then see a strong bounce. FGSI shows a confirmed low on the last low, so that will likely be taken out before an important bottom is found. We also have FOMC this week and Powel speaking on Wednesday, after the FOMC announcement. That could be a potential catalyst for another trendy move. So for now the ST trend (as well as the main trend) is down. Play accordingly until the market shows us a change in that character.

mcm daily market update 21.Jan.22

ST trend: down

Yesterday we were noting that the ST trend was neutral as price was testing ML, so it was decision time. Breakout would get an up squeeze while rejection would lead to immediate downside. We did get the breakout and a large up squeeze right into macro-ML. However, as we warned yesterday "Ultimately, it seems likely that we have unfinished business on the downside". The market rejected hard at macro-ML and buyers did have a feeble attempt to defend ML, but failed and after that there was no looking back. The market lost a whooping 100 points after ML was lost.

The o/n continued the pattern of the last few days. Instead of seeing an acceleration and breakdown, it put in yet another attempted stick save. Price made a lower low, which was unconfirmed on both FGSI and IGSI and the cue to start an attempted bounce. This one, although looking similar to the one from yesterday, didn't make it to test ML yet, so from that perspective looks weaker. Today is OPEX so there was always the prerequisites to have many shennanigans, but with VIX so elevated and markets in a very fragile state after these aggressive declines, whipsaws both ways are expected to be larger than normal. So reducing size and being extra nimble is required if wanting to actively trade. Same as yesterday, it doesn't seem like the market found a stable low just yet, despite the large decline. So the main trend is still down. Large bounces are possible, but are likely to be good selling opportunities, while attempting to buy dips is extra risky. Dust should settle after OPEX, so the timing window for a potential important low would be Monday or Tuesday.

mcm daily market update 18.Jan.22

ST Trend: down (with bounce attempt ongoing)

Friday saw large whipsaws in both directions. After a decently large gap down (30+ points), buyers stepped in and managed to fill the gap. Then the opening low was tested and finally broken, after which the last 2h of the session saw the "usual" late Friday ramp to take out the highs.

The o/n today saw a big "rug pull", as buyers are seeing a 60+ point drop from Friday's highs. That area was tested several times, but macro-ML capped price and finally once buyers lost ML, we had a large flush to take out Friday's lows. Buyers are attempting to reduce the large gap and with FGSI and IGSI at extreme pessimism that was to be expected. So bounce is ongoin ghere, however as long as ML is overhead, sellers have the upper hand. The o/n low is confirmed on IGSI and locally on FGSI, while FGSI is slightly unconfirmed vs the low from yesterday's late futures session. So even if a bounce is likely here, sellers are still preferred, until buyers can prove themselves by gaining efficiency on FGSI and winning back ML.